By Justina Lee
Singapore Airlines Ltd. is acquiring a 25.1% stake in Air India as part of a deal to merge its Vistara full-service airline joint venture with the parent company of Indian conglomerate Tata Group into India's national carrier
SIA will invest around US$250 million in the national carrier as part of the transaction, which it said gives it "a significant presence in all key market segments."
SIA intends to fund the investment with internal cash, which stood at 17.5 billion Singapore dollars (US$12.74 billion) as of Sept. 30.
The companies aim to complete the merger by March 2024, subject to regulatory approvals, according to a filing late Tuesday after market close.
SIA and Tata Sons have also agreed to provide additional capital injections, if required, to fund the growth and operations of the enlarged Air India during the next two fiscal years.
If further capital is needed, SIA's portion of investment will translate to S$800 million, which will be paid only after the deal is completed.
Air India, including low-cost carrier Air India Express, AirAsia India and Vistara, has a total of 218 widebody and narrowbody aircraft flying to 38 international and 52 domestic destinations.
With the integration, Air India will be the only Indian airline group to provide both full-service and low-cost passenger services, the statement said.
Write to Justina Lee at firstname.lastname@example.org
Corrections & Amplifications
This article was corrected at 0228 GMT to reflect that Singapore Airlines Ltd. is acquiring a 25.1% stake in Air India as part of a deal to merge its Vistara full-service airline joint venture with the parent company of Indian conglomerate Tata Group into India's national carrier. The original article incorrectly implied that the merger was with Tata Sons.
(END) Dow Jones Newswires
November 29, 2022 19:45 ET (00:45 GMT)Copyright (c) 2022 Dow Jones & Company, Inc.